Special Section: Trade & Development - Trade, Not Aid: What Africa needs

National Review, Sept 15, 2003 by Thompson Ayodele

'If you want something done well," goes the old saying, "do it yourself." After many years of looking to others to solve its problems, Africa is beginning to follow this advice -- or so its leaders promise. Trade, not aid, is now being promoted by African heads of state as the primary driver of economic development, the one way to improve the lives of millions of impoverished Africans. But the current view is still focused too much on what can be done by rich countries, and too little on what needs to be done at home, by African governments themselves. As African leaders gather in Cancun for the World Trade Organization's Fifth Ministerial Conference, the people of Africa hope that they will use this opportunity finally to commit to free trade on the continent.

For many years, there has been a tendency, both inside and outside Africa, to blame the continent's woes on the policies of rich countries. While there is some truth to these allegations, the critics of wealthy nations never tell the full story. In one area, however, they are correct: Rich countries -- especially the E.U., the U.S., and Japan -- restrict imports and subsidize exports of agricultural products, depressing world market prices for these goods and forcing Africans to import food that they themselves could grow more efficiently. Such policies harm Africa's farmers by reducing their profits and slowing economic development.

External factors are only a small part of the problem, however. Far more troublesome are the trade barriers African countries erect against one another, resulting in the inefficiency, lack of integration, and poverty that plague the continent. The long borders between African nations cause nothing but woe for millions of African traders. High tariffs and other restrictions turn what should be routine border checks into lengthy episodes involving harassment and kickbacks, with state officials demanding bribes to allow even the most basic goods to cross the border. Business trips that would otherwise take only a few hours eventually expand into an entire day or more. In the process, perishable goods spoil and valuables are stolen.

Excruciatingly high taxes are also to blame for the low levels of trade between African nations. While there is much talk of integrating various regions by creating free-trade zones, there has been little action to this end. The Abuja Treaty of 1994 provided for the phasing- out of trade barriers and the creation of a customs union with a uniform external tariff. But the average tariff rate in Africa is still extremely high: 19 percent, among the steepest in the world.

The result is that exports from Senegal and Cameroon, for example, find their way directly into French markets, but not those of their African neighbors.

The easing of border restrictions to allow the free movement of goods within the region would enable Africa to avoid marginalization and to compete in global markets. In spite of low intra-Africa trade volume, many inward-looking leaders -- in some cases, claiming a national- security emergency; in others, openly bowing to politically powerful local industries seeking protection from competition -- are calling for outright border closure. Citing war as an excuse, Audu Ogbeh, the chairman of the ruling party in Nigeria, recently announced that the Nigerian government plans to shut permanently its border with neighboring West African countries. The people of Liberia and Nigeria know that trade between neighbors leads to peace; their leaders apparently have other priorities.

When governments deny their people the right to trade, they simply encourage and perpetuate corruption. And the price of corruption is paid by those who can least afford it: poor consumers. For them, corruption increases the cost of living and makes their lives nothing short of miserable. Free trade is an effective tool against corruption, as it does not require goods to bribe their way into markets. Moreover, free markets improve industrial efficiency. Larger markets allow businesses to take advantage of economies of scale. Competition among producers forces uncompetitive industries and businesses to close up shop or change their operations to produce a better product. This is a great boon to consumers, who have access to high-quality goods at low prices. All of these measures will increase economic growth, thereby attracting both local and foreign investors.

When the world turns its attention to Africa, its focus is always on poverty. Africa's leaders need to recognize that free trade is the only way truly to empower impoverished Africans. Eliminating tariffs, quotas, and other policies that currently frustrate trade does not involve financial commitments or help from foreign governments: All that is required is for African leaders to give up their protection of local political interests.

As the world moves toward greater economic integration, Africa must not be found wanting. Many African countries joined the WTO in the name of liberalizing trade and promoting economic growth -- and preventing a return to the era of trade barriers, economic nationalism, protectionism, and the myriad other measures that check the entrepreneurial spirit. African governments must now give the people of Africa the freedom to trade with one another. Until they are ready to do this, their continent will fall further and further behind the rest of the world.